GDC Vault - Exploring the Tech and Design of 'Noita'
Noita uses a very simple falling sand simulation algorithm, liquids and gases are implemented similarly.
Rigid bodies use a marching square algorithm.
How to simulate all pixels in a big world? Multi-threading! The world is divided into \(64 \times 64\) chunks. Each chunk keeps a dirty rectangle, containing all the pixels that need to be simulated.